Question NW1465 to the Minister of Public Works and Infrastructure
15 May 2023 - NW1465
Chirwa-Mpungose, Ms NN to ask the Minister of Public Works and Infrastructure
Considering reports that a bid rigging had occurred regarding the leasing of the Department of Health headquarters to the tune of R480+ million, (a) what are the full, relevant details of the situation, (b) which parties were involved and (c) what current (i) internal and (ii) external investigation and/or legal processes are underway?
Reply:
The Minister of Public Works and Infrastructure
a) The Department of Public Works and Infrastructure (DPWI) Supply Chain Unit is not aware of “reports” of bid rigging in the awarding of the lease and as such, cannot provide any specific details in this regard. The DPWI can however confirm that tender PT19/008 was advertised in the open market and closed on 6 August 2019 for 28 397.09sm of office accommodation and 474 parking bays for Department of Health (DoH) for a period of 5 years within the areas of Arcadia, Hatfield, Menlyn, Lynwood, Persequor Park or Pretoria CBD.
Notwithstanding the above, on 22 October 2019 DoH wrote to DPWI and requested to participate in a lease contract that was previously awarded by DPWI for COGTA. In this letter DoH further stated that their initial requirement of 28 397.09sm was now reduced to 12 000sm. Due to the change in the space requirement, the tender PT19/008 was then cancelled.
Regarding the contract for COGTA, the DPWI signed a lease agreement on 6 December 2019 with Hiroworx who offered the EXXARO building situated in Thaba Tshwane. This lease was concluded through an open tender process under Tender No HP18/086. Subsequently on 31 January 2020 COGTA wrote to DPWI advising that they would not be able to move into the leased building.
The DPWI was now seized with having a contractual commitment and a signed lease agreement for a building without a tenant. In order to avert wasteful expenditure and possible litigation and whilst recognizing that the initial DoH tender was cancelled but the need for 12 000sm of office accommodation was still required by DoH; DPWI then wrote to National Treasury on 6 March 2020 requesting NT to approve/support the substitution of COGTA as a tenant of EXXARO building by DoH. On the 20 March 2020 NT responded stating that they supported the deviation.
DPWI then informed DoH and on 21 September 2020 an addendum to the lease agreement was signed between DPWI and Hiroworx substituting COGTA with DoH as the tenant in the EXXARO building.
b) PWI officials were involved in acquiring EXXARO building on behalf of the client department.
c) With respect to:
(i) internal investigation and/or legal process, there is nothing we know of; and
(ii) external investigation and/or legal processes, there is nothing we know of.